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Boeing needs to deliver hundreds of MAX jets that were built and parked while the plane was grounded.
Jason Redmond / AFP via Getty Images
Boeing
stock is rising Thursday after investors got good positive news about China.
Bloomberg reported Thursday that the 737 MAX might be recertified to fly in China by the end of January.
Boeing
(ticker: BA) declined to commment.
The MAX jet was grounded worldwide from March 2019 to November 2020, following two deadly MAX crashes within five months. Most countries have recertified the plane for commercial service, but China has yet to take that step.
Shares were up about 1.5% in early trading Thursday. The
S&P 500
and
Dow Jones Industrial Average
both rose about 0.3%.
Thursday’s news might be minor—analysts and investors expected the MAX to be flying again in China in the first quarter of 2022—but China, as a market for Boeing, is a very big deal. The country accounts for about 25% of global jet demand and had taken about 22% of the MAX jets built before the grounding. Orders destined for China represent roughly one-third of Boeing’s inventory of undelivered MAX planes.
Even after China recertifies the plane, there will be a lot for Boeing to do in 2022. The company needs to deliver hundreds of MAX jets that were built and parked while the plane was grounded. It needs to fix manufacturing-quality problems for the 787 jet, which isn’t being delivered to customers right now. It also needs to address problems with its Starliner spacecraft, which will eventually take astronauts to the International Space Station. All that has to happen amid a backdrop of rising inflation and Covid-19.
It’s a lot, but Wall Street sees gains ahead for the shares. About 71% of analysts covering the stock rate shares at Buy, up from about 46% a year ago. The average Buy-rating ratio for stocks in the S&P 500 is about 55%.
The average analyst price target for Boeing stock is about $263 a share, up about 20% from recent levels. A year ago, the average call was about $234.
Write to Al Root at [email protected]
Claudia Bergnaum
Claudia has worked as a journalist for various print-based magazines for more than 5 years. She brings together substantial news pieces from various parts of the US and rest of the World.